After waiting more than four years to be paid for debris removal and hauling in the aftermath of an EF-5 tornado that devastated northwest Alabama on April 27, 2011, Ralton Baker's patience finally ran out.
Baker filed a lawsuit in Franklin County Circuit Court May 29, seeking more than $1.9 million in damages for unpaid work, labor and materials his company performed for Cahaba Disaster Recovery, LLC, an Alabama corporation that subcontracted with R. Baker, Inc., to remove, process and dispose of tornado debris in the Town of Phil Campbell and one-half of Franklin County.
The Franklin County Commission and the Town of Phil Campbell entered into contracts with Mobile-based DRC Emergency Services to coordinate the massive cleanup following the tornado. According to court records, DRC then contracted with Cahaba to actually perform the cleanup and hauling. Cahaba, through a subcontract agreement with R. Baker, Inc., dated May 30, 2011, then subcontracted the job out to Baker.
Baker said his company submitted a bid with Franklin County for the entire cleanup job, but it was not the low bid and therefore wasn't accepted.
The Free Press obtained records from the Franklin County Commission office that show Franklin County paid $2,291,986.66 to DRC. The original amount submitted by DRC was $2,339,722.50, but the Federal Emergency Management Agency (FEMA), which provided the funding to the local entities, approved only the reduced amount.
The commission also contracted with Mississippi-based Hemphill Construction to monitor and supervise the cleanup process. Records show Franklin County paid $893,270.27 to Hemphill.
On its website, Cahaba describes its services as follows: “Whether it's a hurricane, tornado, ice storm, fire, or any natural or man-made disaster, Cahaba is here to help. Our major services include opening streets, curbside cleaning, debris removal, debris processing, automobile removal, vessel recovery and demolition.”
Cahaba's contract with Baker called for his company to “perform all items of work and services set forth in the prime contract in the municipality of Phil Campbell and in the prime contract for approximately one-half the area of Franklin County.”
The lawsuit, filed by Russellville attorney Eddie Beason, claims Cahaba to be in breach of contract with R. Baker, Inc. and seeks money damages for the contract breach, work and labor done, unjust enrichment and failure to comply with Alabama's “Timely Payment to Contractors and Subcontractors Act,” codified in Alabama Code Sec. 8-29-1.
Baker's suit seeks $1,376,682.09 for unpaid services for the Town of Phil Campbell and $543,460.33 for services in Franklin County. Alabama law provides that payment for contract or subcontract services must be made in a timely fashion unless there is lawful justification to refuse payment for amounts due under the subcontract agreement.
Beason said no such reason exists, and since Cahaba received the benefit of Baker's work, he should have already been paid.
As of August 3, court records indicate that Cahaba officials have not yet been served with the lawsuit. The contract reflects signatures from Baker and then-Cahaba CEO Cary Des Roches.
When contacted Monday, Cahaba owner Stewart “Buddy” Fuzzell said he was aware of the lawsuit and could not comment on pending litigation. Fuzzell said DRC bears the legal responsibility to pay Baker and that settlement negotiations were ongoing. Fuzzell said he expects the matter to be resolved in the coming weeks and would make an official statement at that time.
Pursuant to paragraph 19 of Baker's contract with Cahaba, “Subject to the condition precedent ('suspensive condition') stated below, all amounts owed to Subcontractor are payable in current funds ten days after the Contractor has received funds from the Owner or Prime Contractor...If the Contractor has not been paid by the Prime Contractor, for whatever reason, the Subcontractor agrees that the Contractor shall not be obligated to, liable to, or indebted to, the Subcontractor on account of Subcontractor's work.”
With the local governments' payments having been made in full to DRC, Beason said there is no reason for further delay in payment to his client.
“Our position is someone needs to pay us. We don't care who it is,” Beason said. “DRC says Cahaba's supposed to pay. Cahaba says DRC is supposed to pay.”
To further complicate matters, Cahaba has a pending lawsuit in Jefferson County against DRC. Beason said his client also made a claim against the bond posted by DRC in order to perform contractor services, but the bonding company has filed a declaratory judgment action in federal court, asking a court to determine what, if any, obligation it has to pay Baker, Beason explained. A trial date in federal court is set for 2016.
“There is a legal dispute about the extent of DRC's bond. Ideally, the bond would pay us and Ralton would be out of the picture,” Beason said.
Beason said Baker has done additional work for the companies in other Alabama counties and several out-of-state jobs and he's “not been paid in full” for those cleanups.
Cahaba's website boasts of the company's reputation in the recovery industry.
“For over 30 years, we have maintained a credible track record of on-time service, fiscal responsibility and long-lasting relationships with our employees, subcontractors and customers.”
Beason hopes the company will continue its 'fiscal responsibility' and pay his client.
“They've all had plenty of time to pay. Franklin County paid. The Town of Phil Campbell paid DRC. Now, it's time for Ralton to be paid,” Beason said.
